What is a USDA Home Loan?
USDA is the Government Administrator for Home Loans in Rural areas. USDA oversees both USDA Rural Development Guarantee program as well as another Low-Income USDA Direct Loan program.
How do I get Pre-Qualified for USDA Guarantee Loan?
In order to get a loan with USDA, you will need to be Pre-Approved. This takes time, and you will need to provide all required documents, but it is not difficult. We are your Local Lender – right in downtown Salem. We offer home loans throughout the State of Oregon. USDA has specific areas that qualify, including areas like Wilsonville, Woodburn, Dallas, Silverton, Oregon just to name a few. Feel free to call me with an address to see if it qualifies as a USDA zero down home loan.
Is this a First Time Homebuyer Program?
No, it is not. USDA is specifically for rural areas. It can change as it is qualified as any town/area that has less than 25,000 per capita in population numbers. Albany is an area that the population has increased to the point that most of the area doesn’t qualify, but there are still parts of it that actually still do, so it is a good idea to call and I will look up the address for you.
Are there Loan limits?
No, USDA doesn’t have loan limits – they are approved up to the conventional loan limit of $510,400 which is also the conventional loan limit. Having a loan amount above that figure just means that you will have a JUMBO loan and that is another type of loan. Yes, we do these too – just not on this program.
Are there Income Limits?
Yes, USDA has income limits. These limits are for each individual county you may be purchasing in as well as Family Size. For example, a family of 1-4 people (living in the home) in Yamhill or Washington Counties, (Portland area) the annual income limit is $80,500.00. If your household income exceeds the amount for your County, it is possible to have that reduced by certain allowable deductions. Please call today to see how you can qualify by USDA standards. Most of Portland Metro area does not qualify (too populated) but again, if you call with a specific address, I can look it up for you. There are area just outside the city limits that actually do qualify.
How much is required for a Down Payment?
Zero Down loans are truly NO down payment required. That being said, there are some expenses that are incurred during a purchase that are not included in the loan. It is always advised that you get a Home Inspection done on any home you are considering buying. This initial inspection is for your information and is not included in the overall loan fees. Make sure you are pre-approved for the USDA Guarantee Program as there is no better loan available for the general public with these very low, 30 year fixed rate home loans.
Who Pays the Closing Costs?
Basically, it is written into a contract how the fees will be paid. For most 100% financing, Zero down home loans (such as USDA and VA) it is written into the purchase contract that the Seller will pay all or most of the fees. Gift funds can also be used when needed. If these are not option, or it simply didn’t get done that way, feel free to discuss your options with me so we have a plan to make sure things go smoothly and you can buy the home with little to NO money down.
Is there Mortgage Insurance with USDA loans?
Yes, any loan with less than 20% down has some form of Mortgage Insurance (MI). There are two types of MI – upfront and annual. The upfront is an amount that is rolled into the loan. Annual MI is actually a monthly amount/percentage. The good news is that compared to FHA, USDA annual is MUCH lower. Currently, it is less than one quarter of the monthly (called Annual) Mortgage Insurance. This is the amount that will be added to your monthly payment. Call me for a comparison – I will be happy to go over numbers with you.
What interest rates are offered on the UDSA Loan program?
Government rates are the lowest available. Low, 30 year fixed rates and very low MI you will be able to afford to put more toward your monthly mortgage payment each month.
How long after a Foreclosure can I buy using USDA Guarantee Home Loan?
Three years from the date on the Foreclosure Deed. These types of approvals will need to be approved by USDA and the Lender with which the loan will be placed.
Rachel Cole, Senior Loan Officer
Rock River Financial
388 State Street Ste 500
Salem, OR 97301
Office: (503) 316-8000
Cell: (971) 301-9741
Toll-Free: (877) 316-8202
Fax: (503) 316-8004
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